PALO ALTO, California, May 7, 2026, 04:04 (PDT)
AppLovin Corp put up first-quarter sales of $1.84 billion, a 59% surge, with diluted EPS hitting $3.56. The Palo Alto-based firm’s upbeat second-quarter revenue outlook topped Wall Street estimates, reigniting debate around its AI-powered ad platform and the stock itself.
Timing is key here. AppLovin shares have swung sharply after their big rally, with investors now demanding evidence that the company’s momentum can move past mobile gaming into areas like consumer and e-commerce ads. Management is projecting second-quarter revenue between $1.915 billion and $1.945 billion—topping the $1.9 billion estimate from Wall Street, according to Investor’s Business Daily.
Shares changed hands at $468.83 in premarket action, sliding 1.9% from the prior close after a choppy response to the earnings report. Investor’s Business Daily noted the stock popped up to 10% higher after results hit, then lost momentum and fell back during after-hours.
Adjusted EBITDA—essentially profit stripped of interest, taxes, depreciation, amortization, and stock-based comp—jumped 66% to $1.56 billion. At 85%, the margin stood out, unusually high for a software and advertising name, catching analysts’ eyes almost immediately.
AppLovin’s revenue boost was driven largely by Axon Ads Manager, according to a filing. That’s the company’s AI ad-buying platform, used to optimize for advertiser return targets. Net revenue per install jumped 93%. Installation volume, though, slid 18%, muting some of that gain.
Adam Foroughi, the chief executive, pointed to gains from advertiser onboarding and tweaks to its models during the latest quarter. “We have 100% seen faster improvements to the models,” he told analysts, referencing both the consumer side and gaming. Foroughi added that AppLovin now expects to generate “well over $70,000 a year from every new customer.” Investing.com
James Heaney at Jefferies stuck with his Buy call and $700 price target on AppLovin following the latest results. The firm pointed out that April saw e-commerce ad spending hit a monthly peak, with Jefferies noting that stronger average spend from new customers has boosted its confidence in revenue growth for the rest of the year.
Competition isn’t straightforward here. AppLovin lists big names like Meta Platforms and Google among its advertising customers, according to the filing, but it flags a risk: some clients double as rivals and could decide to back their own offerings rather than stick with AppLovin’s ad tech.
AppLovin kept up its share buybacks, snapping up and withholding 2.2 million shares for roughly $1 billion during the quarter. As of March 31, the company still had $2.3 billion left under its board-approved repurchase plan, according to the filing.
There’s a risk here: the growth curve could level off before investors decide the stock is worth its price. In its filing, AppLovin flagged that the breakneck expansion since Axon AI launched might not last. Most clients don’t tie themselves down with long-term deals, and the company is exposed to competition, privacy laws, potential AI rules, and legal or regulatory fights that could weigh on performance. The same document also outlined ongoing securities and shareholder derivative suits tied to claims about its advertising products and growth prospects—claims AppLovin says are baseless.
AppLovin’s latest earnings dump more fuel on the bull case, with revenue picking up speed, margins climbing, and outlook pointing to yet another quarter-on-quarter gain. The bigger question comes next: can AppLovin keep stacking up new advertisers without letting those standout margins slip?
